'Even Spaceships Must Return to Earth': Morgan Stanley Warns Investors on Virgin Galactic Stock
Ben Bergman is the newsroom's senior reporter, covering venture capital. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks. Follow him on Twitter.
Take your pick of metaphors – rocketing, earth shattering, stratospheric - Virgin Galactic stock has been surging this year, up more than 200%. The Mojave-based company now has a market capitalization of $7.2 billion even though it only generated $3 million in revenue last year.
Why all the excitement? No one seems to know, including Morgan Stanley, which issued a research note Thursday expressing bewilderment.
"We do struggle to identify significant thesis changing/accelerating events since the time of our initiation in early December of 2019," wrote analyst Adam Jonas in a note titled "Even Spaceships Must Return to Earth."
Jonas said he was surprised by the volume and volatility of the stock and he urged investors to be cautious. "A modest correction is overdue, and frankly, healthy," he wrote.
Investors did not seem phased by the warning, however, as the stock was nearly flat in Thursday's trading session after the note was published, though it dropped nearly 10% in after-hours trading. The stock closed Thursday at $37.26 on the New York Stock Exchange.
Virgin Galactic became the first publicly traded commercial space tourism company in October, going through a reverse merger.
The company's two competitors, Elon Musk's SpaceX and Jeff Bezos' Blue Origin, are privately held. Blue Origin, headquartered near Seattle is funded almost entirely by the Amazon CEO while Hawthorne-based SpaceX is VC and debt funded. The company, which is now valued at over $33 billion, got its latest financing from an $800 million Revolver facility from Bank of America in December.
Virgin Galactic will report earnings for only the second time as a public company on Feb. 25
Subscribe to our newsletter to catch every headline.
Los Angeles is home to around 5,000 startups, the majority of which are in their young, formative years.
Which of those thousands are poised for a breakout in 2021? We asked dozens of L.A.'s top VCs to weigh in. We wanted to know which companies they would have invested in if they could go back and do it all over again.
Boiling<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGaW1hZ2VzJTNGcSUzRHRibiUzQUFOZDlHY1EwRjdlRzlxY3JFd1lNVS12T2VTWng1NFd6VFdWUktaMFpyQSUyNnVzcXAlM0RDQVUmaG89aHR0cHMlM0ElMkYlMkZlbmNyeXB0ZWQtdGJuMC5nc3RhdGljLmNvbSZzPTEwMDImaD1jOGIyM2Y5YWNhNGNhNDY3NzZhNmUzNTU3MWI2YzAzNjcwOTU1Nzg0ODQxZDdiZGIyZjAxMzUxNjdkN2I5NWY2JnNpemU9OTgweCZjPTE2MDM4MjI5MTgiLCJleHBpcmVzX2F0IjoxNjY1MTY5NTcxfQ.iTVRhSe0UulUxSyMUZ4QA7_0njADdWe3QEJ28-xW6m0/img.jpg" id="a03b9" class="rm-shortcode" data-rm-shortcode-id="03faa4898896a9ce5be09d51dc104b73" alt="Pipe logo" />
Simmering<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGaW1hZ2VzJTNGcSUzRHRibiUzQUFOZDlHY1JlR3QzLWlHSmFtYVJnLXNwSXVYcDc5N0xOdnpTYWhYYVloQSUyNnVzcXAlM0RDQVUmaG89aHR0cHMlM0ElMkYlMkZlbmNyeXB0ZWQtdGJuMC5nc3RhdGljLmNvbSZzPTYwNiZoPWU3NzNhYTkwODZkNmE4OWQwMWU0ZjZkODk0ODU1ZWEyZDIzMmU3YTYyNzJjYTU3Mzk3MmI0NmQ0NjAxMDY3YzMmc2l6ZT05ODB4JmM9MjQ3NDg5MDE0MiIsImV4cGlyZXNfYXQiOjE2NzAzMzU0NjB9.iqCUfvVUI22AGAz-QYPiS7XFb26sw3mGaU8seorLqxQ/img.jpg" id="44f84" class="rm-shortcode" data-rm-shortcode-id="cbdc9b0cdf21d3873eef2a40647ae810" alt="Freck Beauty logo" />
- Meet 3 Early Stage Science Startups at First Look's Showcase - dot.LA ›
- What Early Stage Startups Should Be Thinking About COVID-19 ... ›
Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.
But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.
We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.
Hottest<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyNS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1OTQ3MjQ2OH0.JYCNMjYvosYa5SI7701CH_jMFbeFdMcRCChXt442cq0/img.png?width=980" id="4a086" class="rm-shortcode" data-rm-shortcode-id="f2f18f0bc4400a388e43736c560ff87f" data-rm-shortcode-name="rebelmouse-image" alt="PopShop Live logo" />
Boiling<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyOC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MzI5MjYwMn0.h7Nq7GiwXTcg_7Io5WEXblFX0rWQHxn69RzluTh7n_Q/img.png?width=980" id="44eea" class="rm-shortcode" data-rm-shortcode-id="d02c4cad650c987721ff91ee939a5bf7" data-rm-shortcode-name="rebelmouse-image" alt="Scopely logo" />
Simmering<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzMxNi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1NjM4MjQ5Mn0.XSHQfru9tTpdeBqd_ecb--8DiZg_vdyOtF9ZV9zAG78/img.png?width=980" id="f1665" class="rm-shortcode" data-rm-shortcode-id="ccc0b78dd8ae8cda9bf95979e83506fd" data-rm-shortcode-name="rebelmouse-image" />
Warming Up<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzYwOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY3MzQ1MzE4OX0.fS5XtGx4M-tqWecrth6NCHawGSg2aSkb-yR-cY3wbtU/img.png?width=980" id="c6334" class="rm-shortcode" data-rm-shortcode-id="aa7476f8a6216fed6b372d8a59876a6b" data-rm-shortcode-name="rebelmouse-image" />
- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- The dot.LA/ Pitchbook Top 50 LA Startups for 2020 Q2 - dot.LA ›
- dot.LA/Pitchbook 50 Hottest Los Angeles Companies - dot.LA ›